6.
Case Study Questions1. What are the four dimensions of ‘distance’ in Starbucks’ international expansion?2. How did Starbucks reduce the ‘distance’ vis-à-vis host countries?3. Looking only at the four dimensions of distance, should Starbucks invest in Japan or China?4. If you had been in charge of the international expansion of Starbucks, what would you have changed?5. In the case of Starbucks, what are the interactions between company-specific features and the four dimensions of distance?

8.
Starbucks and the Four Distances Geographic• Difficulty in transporting teas and roasted beans to far-away markets• Rural areas abroad do not have the infrastructure required Economic• In some countries, Starbucks coffee costs more than a meal• Costs of setting up operations in a new country can be highStarbucks’ approach to bridging the Four Distancesclassifies it as an International Projector.

10.
Degree of MultinationalityLicensing – The bulk of Starbucks’ foreign retaillocations are licensee-operated (53% in Europe and80% in Asia)Export – Starbucks exports its “ChannelDevelopment” products from North AmericaLocal Packaging / Assembly – Starbucks operatestwo major facilities outside of North America forroasting and distribution (Netherlands and theUnited Kingdom)FDI – Starbucks owns and operates a minority of itsforeign locations (47% in Europe and 20% in Asia)

11.
International Expansion• Starbucks plans to add 3,000 new stores to its Americas and U.S. division and to renovate thousands of other stores in the region• In Asia, Starbucks will have almost 4,000 stores by the end of 2013, including 1,000 in China• Right now, the largest markets are the United Kingdom, Canada, and Japan

14.
Country Specific Advantages Home country CSAs• Starbucks exploited a change in the American coffee consumption palette Host Country CSAs• The same trend is occurring in China and much of mainland AsiaThe mix of weak CSAs and strong FSAs placesStarbucks in the 4th Quadrant of the FSA-CSAMatrix